Sell and buy back (SBBA)
An interbank arrangement of an outright sale of securities, promises to reverse it and a later outright sale back at a set price.
A sell and buy back agreement is an arrangement used in Islamic interbank money markets in which one party sells securities outright, the parties exchange promises, and on a future date the securities are sold back at the original price plus an agreed profit. Bank Negara Malaysia's policy document on Islamic collateralised funding defines it as separate transactions in that sequence and sets out how banks may use it for liquidity management. The Bank's Shariah Advisory Council has resolved that a sale and buy back on different dates is permissible and is not bay al-inah, a point on which other standard setters' positions should be checked.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.